business never sleeps, this is squx squ "squawk box." welcome to "squawk box" here on cnbc, live at the nasdaq market site in times square. i'm andrew ross sorkin, along with joe kernen. kelly evans hanging out with us today. look at u.s. equity futures. a bit of a mixed picture. virtually unchanged across the board. >> you say that every day. >> laically it's been flat. >> virtually unch. >> if we flip the board around, what happens? >> we could do that as well. the s&p 500 off by a point. the nasdaq up by a point. the dow up by a point. those things flipped around a few seconds ago. from the red to the green, from the green to the red. the nikkei, hang seng and shanghai a mixed picture. >> what did you make of the market yesterday? just to fill in what happened

yesterday? what did you think? weird, right? >> what you are talking about? >> went all the way up. >> yesterday's session? >> yeah. >> what happened midday that knocked that off? >> they thought it was the ap story about trump's tax plans, how they'll scrap it and start all over again. i don't know. >> during the day, the guy in north korea said we're this close to nuclear oblivion, the markets just tread water. but then -- >> the tax plan. >> syria saying, yeah, russia said one more move, we're at war. and then the futures didn't move. but then they said something about the tax plan, could be a week late, the markets moved. that's very telling. >> how do you price it in? you can kind of -- >> when the world ends, it doesn't matter -- >> might as well trade until it does. >> flight to safety. i'm in safety. it doesn't matter. >> even oil, with everything happen.

>> when music is playing, you have to dance. quick heck on what's going chec in europe and then oil. the dax down a bit. cac, we will call that flat. virtually unch. it is unch unch. look at crude now the you can buy a barrel for 52.95. fed chair janet yellen says the u.s. economy is healthy now and should continue to grow at a moderate pace. speaking last night she outlined one of the challenges for the central bank. >> if the economy ends up overheating and inflation threatens to rise well above the target, we don't want to be in a position where we have to raise rates rapidly, which could conceivably cause another recession. we want to be ahead of the curve and not behind it. >> chair yellen did not offer

specifics on the timing of the rate hike or the reduction of the fed's 4$4.5 trillion balanc sheet. jana partners raising its stake in whole foods to 8.8%. the activist investor looking to share up the board. they want to speed up a turn around, improve technology and operations and explore a possible sale. whole foods lost nearly half their value since peaking in 2013. a bigger pop yesterday. jana has lined up possible board nominees. flen m glenn murphy, tad dickson and meredith adler, jana is also working with diana dietz and well known food writer mark bittman. >> mark bittman. an old friend of mine. former "new york times" writer. >> you should give him a call.

>> i should. >> making his way on to the boards of corporate america. >> all of those individuals bought shares in whole foods as part of the campaign. sources tell cnbc that jana has yet to speak to whole foods management about the ideas. the firm is attempting to engage with ceo john mackie. toshiba filed its twice delayed earnings report today without an endorsement from the company's auditor. the move sun precedented for a japanese company and increases the likelihood that toshiba will be delisted from the tokyo stock exchange. there were bigger than expected losses due to write downs at westinghouse. shares of toshiba, not as big a mover today as you would expect. >> there's a la la land joke in there somewhere. you said pricwaterhousecoopers. >> they got renewed.

>> i don't understand why the girl got fired, too. the girl and the guy, the guy was at fault, but the girl on the other side got fired. >> the individuals. >> both of the people back stage. >> but pwc is back. >> all right. >> anything in there about how to handle a corporate crisis? >> no tweeting back stage. >> no. that's not a huge problem. >> now a third briefcase. >> is there? >> thank god. we've got to get this right. >> one briefcase on stage left, one on stage right, and in the control room. so when something goes terribly wrong, they would know immediately. >> it's very important. i'm surprised the world still -- >> still is turning. >> the sun came up the next day. >> tgetting rid of the category of actor and actress. >> how old are you? >> 31. >> so you're a millennium. >> we got that for us.

>> isn't mtv -- that is not even cool among your people? >> no, i feel bad for mtv. >> you do. >> of course. it's not 1995 after school anymore. >> it's something my kids might watch. >> you'll have to tell me. >> thanks for wearing orange and a belt, though. >> if he doesn't have to, why do i have to? >> you didn't have to. orange is not a spring color. >> the belt, i mean. >> autumn color. >> it's true, i'm in the wrong -- >> we had a conversation about belts this morning. >> we did. again, it's a millennium -- >> as we discussed multiple times before. a properly tailored pair of pants don't require a belt. >> just doesn't look good. >> qualcomm is counter suing apple in a dispute over licensing fees for mobile technology. the chipmaker accuses apple of sper fe interfering with royalty payments.

this after apple sued qualcomm for $1 billion. and a top ford executive says the suv boom will continue. >> stepping out. >> he says he expects the market share of suv s to rise to 45% o industry sales within five to seven years. as long as we don't have that one-child policy adopted over here. >> they are getting rid of fuel economy standards. >> that's what it is people want the functionality. >> if you're older, it's easier to get in and out of an suv than a sedan. >> sorkin will need a second backseat suv. >> let's be honest, i need a minivan. i heard very good things about the pacific ka aa and sienna. >> and it fits with your overall persona. >> get that oldsmobile that

danny divito gets -- >> in get shorty. >> it's culled the si edcalled . john travolta says it is the cadillac of minivans. you really are cool if you pay $160,000 for one of these things. or not. watching shares of tesla again today. the company officially becoming the most valuable u.s. carmaker yesterday. now boasting a bigger market cap than both ford and gm. probably not a bigger enterprise value. >> how much debt does it have? >> i think ford and gm have more. >> ford probably is number one. that was their issue for years. >> a good issue to have. >> the high debt level. yeah. >> all right. we are returning to the story of the day. the scene of the crime, call it what you like. united airlines responding to a

social media firestorm after a passenger was dragged off a plane late sunday. the video has gone viral. if you have not seen it already, i'm sure you can see it right now. it shows a passenger on a united flight from chicago to louisville being forcibly removed before takeoff. the flight was overbooked, after the united team looked for volunteers, one customer refused to leave the aircraft and law enforcement ended up dragging him off the plane. last night in an e-mail united's ceo oscar munoz said employees followed established employees when removing the traveler and called the passenger disruptive and belligerent. munoz said the company could learn lessons from the incident but he stands behind his employees. >> why can't -- the way -- number one, the whole overbooking thing -- it's outdated. >> doesn't work. >> it doesn't. i can't believe there's not some aillibaba il e. algorithm that

maximize revenue and leave enough space for uncertainty to some extent. someone might not show. someone does show. isn't there a way -- >> i think this is the algorithm. >> there has to be a better way if there are those instances where it doesn't, if they don't do it for 800? 1200? >> they do. >> why didn't they go up above 800 yesterday? >> i've been on planes where they offered $1800. >> i can see you waiting. just like at an auction. >> i think i told you this story yesterday. that i was on the flight with robert shiller who was pulled off the plane. we debated prior to getting on the plane how much they were going to offer and what -- we were all saying to each other, how much would you really go for? >> isn't that the way you should handle it? >> it is. but the problem is these days oftentimes, dare i say, whatever

the value is, unless you truly are a leisure passenger with nothing to do on the other end, $800 is not enough. whether it's to get back to your family or to get you -- >> how about 8,000? >> all of a sudden maybe this is getting interesting. >> even to you. >> certainly $8,000 is worth it if this is the -- >> there's got to be a number. they might say that's too expensive? what is this pr hit? >> here's my question for you. let's say you have to go on a trip tomorrow. you go to expedia, whatever you do, kayak to find your flight. united pops up as the flight that makes the most sense. the timing of it, how you get there, the price. you are now going to say, actually, no. i will take the delta flight instead. >> no way. no way. >> no, right? >> there might be a few because of social media, just like -- >> there's enough destinations.

we talked about concentration of airlines, where you may be on united whether you want to be on united or not. >> i may be flying united today. eem n i'm not kidding. i might just throw my weight around. where is my champagne? what? >> can you bring your iphone? actually, guys, can we strap him up with a gopro? this will be our segment tomorrow morning. joe on a plane. >> you know when -- this might be the best day to fly united. i bet people will be so nice. >> that's true. >> i don't think you should necessarily -- when you're at the gate, can't they figure this out at the gate? >> that's what the thing. the shiller story, the instance was they had too much weight on the plane, they made a mistake. it was too hot. there's a whole thing. this is different.

this is -- >> did they say can the heaviest people please stand up and leave? >> no, they said they needed a couple volunteers there were not enough. >> andrew, you feel bad for the guy, but he would have infants removed even if their parents don't get off. he can have them go and go to a foster home. >> joe knows i have a view about babies in first class. i have not seen an ad for an airline where they have advertised that (person doing their work or sleeping with the screening child. >> they'll reunite with their parents in a couple days, if necessary. baby is is out of here. >> as a proud father of a baby -- >> now. >> i would sit happily in coach. to politics now, i make no friends with that. >> you've tried. normally you would never say anything. >> there are a couple road wa

warriors out there. the white house economic advisory group led by steve schwarzman is due back in washington today. kayla tausche has a look at what could be on the agenda. >> good morning. it's the second such meeting since that group was formed in december. you mentioned steve schwarzman who chairs the group. ceos of gm, walmart, pepsi and more companies are expected to attend. that have breakouts into sector specific groups led by the cabinet secretaries running budget, transportation, environmental, education and commerce departments. then they'll come together as one large group. that's where we could hear them and the president speak before we talk to some of those ceos later this afternoon. president trump has convened nearly a dozen forums, councils, working groups and task forces from industries ranging from airlines, community banks, pharmaceuticals, retailers and trucking. attendees that i spoke to, all

of whom prefer to remain anonymous said that he appears more engaged, more curious, more inquisitive about the actual business that these people are running and the content of the meetings, but that policy-wise it actually lacks the urgency of the financial crisis. most of the multinationals that come to the white house are just that, global companies with diverse work forces. they worry that their views will lose in a tug of war with the economic nationalists on trump's team. the press secretary sean spicer addressed this widely reported globalist, nationalist ideological dispute at the white house yesterday. >> whether it's this, healthcare, tax reform, trade, he's got a divergent set of opinions of experts. the idea is not to have one set of thought and policy flowing through. >> ceos say they would rather be at the table than left out of the conversation because the worst thing that could happen or

the worst case scenario is not that bad. they share their views and end up on the cutting room floor, but at least they were. all the attendees i spoke to say it's hard to see if these meetings are bearing fruit yet. >> >> kayla tausche, thank you. bracing for earnings season, i guess that doesn't imply we're bad. it's anticipation of what we'll see. joining us is peter chikini, co-head of equities at cant' co cantor fitzgerald, and steven reese. does that work being a co-head of something? >> typically it's terrible. >> remember citi group? >> yeah. >> john reid and who else?

>> john reid. >> who else? >> sandy weill. >> that doesn't work. remember ancient rome. does it work where you are? you have a good relationship? >> i have a great relationship. >> do you guys agree on what will happen? >> not always. but as a good couple, we talk. >> are you both recommending a fully invested position in equities? >> i'm the strategy guy, he's the operations guy, we're complimentary. the answer to that is i'm not. >> he's long, you're short. >> i wouldn't say i'm short. it's tough to be bearish given the amount -- i know you hate to hear it, the amount of global accommodation out there. the ecb released its bond buying program. difficult to be bearish in that circumstance. you're joking about how the marches are unched every

morning. something is not quite right in the markets. it's hard to say to your clients hedge your portfolios up. on the other hand it's hard to say, you know, get long and strong. >> what do you mean there's something unched? >> because it's somewhat quiet or directionaless, does it mean there is something wrong? >> there's an influx coming from the central banks which is sup pre suppressing risks. >> so it's not every ladies and gentlemen la legislative stumble? >> clients call up and say why did this happen? i would love to say i have no clue. >> how important is tax reform? >> tax reform longer term is important. that's going to affect real metrics like earnings per share and growth. the fact of the matter is the market is trading on it like it

will happen tomorrow but it will not go that way. >> what's most important in your view? >> in the u.s. you need to take a more sector specific approach from current levels. so you won't like it, but our view on the u.s. is unchanged, 2375 -- >> virtually unchanged? >> 2375 is the far get on the broader s&p 500. we'retelling clients to focus on energy or financials, the longer term story of rates, regulation and growth is intact. we shifted away from the u.s. to europe where the growth number there's look good. we think earnings have more upside surprises on the back half of this year. earnings will be good. but the market knows it. we're up 6% year to date. the forecast is 8%, 9%. it's pretty much reflected in the market, most is coming from energy and financials. if you take that out, the growth rate is 2.2%. >> everybody seems to be saying go to europe, look outside the u.s. >> it's becoming more and more consensus. if you talk to our clients, it's

tough to find someone overweight europe. it's been so bad for so long. so easy to hate. people are more underweight than they should be. >> the risks in europe are heightened, too. where you think the tail risk might come from, i think europe is near the top of the list. >> to your point on taxes, that's the upside. the best case didn't assume a change in policy. until we get that, the market won't range. >> gentlemen, thank you both. you guys have the sock thing going over here. >> you have to love the argyles. >> h.w., there was a shot yesterday, i guess president clinton visited not hillary -- i know that still hurts. but bill clinton, president bill clinton visited h.w. 41 yesterday. brought him a pair of socks. always a schtick between those guys. >> there's his socks. >> those are -- those are -- you

see those? >> i'm glad there are no holes in them. >> we don't know that. >> thank you, guys. coming up, new data out this morning on small business optimism. kate rogers will have details. "squawk box" will be right back. what powers the digital world? communication. like centurylink's broadband network that gives 35,000 fans a cutting edge game experience. or the network that keeps a leading hotel chain's

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spot posting double digit volume growth in the past decade according to the brewers association. craft hit a speed bump in 2016 posting single digit volume growth of 6%, according to the latest brewer's association numbers, which estimates the craft segment accounts for 12% market share by volume. with a record of more than 5200 craft breweries in operation, competition for tap handles and shelf space is fierce. is the craft boom running dry? local brewers here at the craft brewers conference says there's still room to grow, because this industry is different than most, where it's not about loyalty about just one brand. craft drinkers are loyal to craft beer in general, going out of their way to get their hands on that one unique brew. a win for one is a win for all. economists say it's also an opportunity to invest. >> what investors are looking

for is return. and in a fast-growing space, we are seeing many craft brewers who are growing rapidly, and in the short to medium term can offer growth for investors. >> even as craft is slowing down, private equity firms like ab inbev and coors are still making investments in the segment. in ra ma market where overall b sales are flat, craft remains an opportunity. are these all going to consolidate? are people just going to go back to drinking bud light? >> we're seeing a lot of consolidation in the field. the thing about being craft, you have to be small. you have to have the craftiness, per se. that makes it so crafty. the problem is that they need the distribution. that's why you're seeing them go to the ab inbevs or having private equity invest in them. we've been talking to brewers, they seem excited about it. they think the growth is still there. >> yeah, selling out to the man.

that's what always happens, landon. as long as it still tastes good. >> that's right. >> a bit sexist. >> what? the man instead of the woman? >> better way to say it. selling out to the person -- but that doesn't imply pushing back against the person. i switched to person. i got it from him. >> selling out to the person? >> yeah. >> selling out to the person. you can't push back. you have to push back against the person. >> you can be married, pushing back against the woman. >> that's his point. >> fill me in on what -- the right way to do that, nyt. >> what is the style book or something you have? >> coming up, new regulations are changing the game for currency traders. we'll get new regulations on "squawk" and more transparency means more opportunities. one ceo is trying to simplify the process. he joins us next.

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welcome back. you're watching "squawk box," live from the nasdaq market site in times square. yes, yes, you are watching "squawk box." good morning to you. u.s. equity futures at this hour, i can't say -- i'm not allowed to say unch. but look at the s&p 500. >> every day you say it the same way. give us some perspective. >> yesterday was a bit of a roller coaster. yesterday was a bit of a roller coaster. >> yes. up and down. >> up/down, up/down. >> where did it close virtually? >> unch. >> there you go. it looks like the dow would open

up 8 points higher, the nasdaq opening up 2 points. dialog semiconductor shares are down sharply. set for the worst day in more than 16 years. analysts downgrading the stock to sell saying there's strong evidence that apple is developing its own power management chip replacing dialog's in the iphone by 2019. last year shares of imagination tech fell 17% after the company said it would stop using its graphic chip. in that instance, apple had a stake in the company. not only did the stock go down, to some degree apple was a semi-loser itself. >> dialog down 19%. the currency trading game is changing, with transparency comes opportunity. joining us is jamie singleton, chair and ceo of the curex group. how big is daily volume in currency? 5 trillion?

much higher? >> no, it's 5 trillion. it's receded a bit the last couple of years. >> it's gone down? >> gone down, peaked at about a trillion more in 2014. it's receded somewhat? >> why? what's changed? >> i think a number of things have happened from a regulatory standpoint, there's greater scoot scrutiny. cost among the banks has gone up. basil 2 and 3 requirements. the depegging of the swiss franc created a lot of disruption among the banks. >> so they felt like they couldn't have the exposure to some of the currency stuff -- >> our business focuses on the buy side, asset owners, corporations and pension funds, the drop in volume comes from the high frequency traders. >> a corporation's point of view, they might have operations in another country, have exposure there, have to figure out how to hedge that, that's

where you guys come in? >> correct. we're trying to bring best execution standards post 2008. in this country we had dodd-frank. in europe, they had method 2. there's not only moving otc related securities through clearing houses, that's happening in europe and the u.s., but on top of that they're focusing on best execution standards. >> the interesting thing, i was looking at this, i didn't realize, for all the problems you say we think we have in the equity markets, in terms of what's happening with the liquidity challenges, the fragmented nature of it, you think that's far worse than the currency market? >> let's say it's less developed. we're the least lit of the capital markets. we're the largest, most fragmented, it's global, trades 2 24/5, our machines never close down. it's a market rife for inefficiencies. >> is that why it's so big?

it gives people more opportunities to exploit? >> there's been a technology war that's going on. there's been literally hundreds and hundreds of millions of dollars invested in algorithms and in technology. as that sophistication has grown on one hand, the users, operational users of fx like corporations, asset managerses and pension funds, they don't have the money to invest. so it's a tale of two cities. >> when you paint that scenario, it sounds like the answer is more regulation, more oversight. but you're saying the regulation partly got us here in the first place what is the answer? >> fx is interesting from a regulatory standpoint. spot which is large, is not regulated by anybody. it's subject to the central bank's oversight. so things like the sec, fca don't get involved. when you move to derivatives, currency, products of that sort, that is moving as a result of

dodd-frank and method 2. when you think of those derivative products, they can't exist without spot. that's the genesis. but ironically it's where there is not any regulatory oversight per se. >> so maybe there needs to be some? >> well, the industry is doing it itself. the central banks around the world will issue a global code of conduct. they've been working on it for two years. it's a guideline but not enforceable. 2 creates standards that captures spots. if you're a u.s. corporation doing business in europe and involved in a currency conversion, will you have to have precise time stamps, fees related to that transaction. and it all has to be published, going through a central authority that will create a tremendous burden. >> like they say, sunshine is the best disinfectant. >> it's an opaque market. we're coming into the light

finally. >> yeah. jamie, thank you very much. >> thanks. >> the national federation of independent business was out with its latest report on optimism. kate rogers joins us with the details. good morning. >> main street optimism dipped for the second month in a row but holding at high levels per the nfib. the monthly read for march showed a drop to 104.well above the average of 98. plans to create jobs, make capital outlays and earnings trends showed gains in this reading underscoring the idea that optimism is slowly trading into hiring and spending among the small business set. the uncertainty index this month hit 93. that's the second highest reading in the survey's history. the group's chief economist said this could be driven by government policy and lack of ability to plan on behalf of small business oerns given the current state of affairs in d.c.

i talked with bill yesterday, he said optimism will likely hang on at this rate for a number of years but action will be needed from the new administration to have impact on hiring and investing. this is not the month we'll find out about the pulling of the healthcare bill last month. the group said that will be determined in april's data which will be released in may. >> it correlates pretty well with equity prices. they're both sort of forward looking and both dependent on something actually happening. >> absolutely. the nfib was stirring last month saying we need d.c. to act on the agenda voted for in november. so they are hoping and waiting for something to happen. tax reform will mean a lot to this set as well. we'll watch and see. >> kate rogers, thank you. tell you what's coming up -- i'm thinking about belts again. >> yeah? >> you're right. if it's perfectly tailored for

someone with your body, it is perfect. it sits right there. >> yeah. >> as your body changes. >> yes. >> mine is actually occupying a slot. there's a slot here. >> right. >> as your body changes, you can go back to the taylor. >> no, no, no, she doesn't have a slot. there's a slot this fits in. if i don't have it, there's going to be an -- i need a belt. cliff robbins is known as the friendly activist. he will tell us where he's putting money to work in the trump economy. enjoy it. enjoy your youth. a lot of us think it's wasted on people like you. young people. senator heidi heitkamp will be here to talk trade and gorsuch, too. didn't lieberman become an independent? she wants to give the export/import bank more power.

keystone, voted for gorsuch. later, former business roundtable president john engler will tell us what to expect when ceos gather in washington. stay tuned, you're watching "squawk box" on cnbc. i think that she's a very nice girl...

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welcome back to "squawk box." time for the executive edge. brazil's third largest airline will take flight today on the new york stock exchange. azul airways raised 645 million in its dual ipo in brazil and new york. the company's u.s. adrs priced at $20 a share. the mid point of the expected range. strong demand led the company to boost the size of the deal. the company will trade on the nyse under the symbol azul. it was founded, started back in

2000 by jetblue founder david nelleman, he will join squawk on the street at 10:00 a.m. eastern. >> what is their policy on bumping passengers? >> and children in first class? i don't know. >> i don't think they do first class. >> they probably don't. >> yeah, they have -- it's called something. >> azul, i thought you mint jetblue me jetblue. >> leeco has dropped its bid for the takeover of vizio in the u.s. that company cites regulatory headwin headwinds. there was word that the deal would fall through because of the inability to get permission from chinese regulators. >> a little soccer this morning. u.s. and mexico and canada will make a bid to co-host the 2026

world cup. if successful, it would be the second time the world cup that had multiple hosts. the world cup will expand from 32 to 48 teams. under the joint bid the u.s. would host 60 games, the u.s. and canada would have ten games each. >> i don't know about this. >> because? you don't think we're soccer -- >> it feels a little hokie to say we're altogether now, and from the players point of view, do you want to be playing -- just call it the world cup, it's held all over the world. even now when they do the olympics, if you wanted to see a women's soccer match, it was six hours away. i feel like if this is part of the trend where you don't have to bring everybody to one centralized location, i think it's tough on the athletes. >> always thinking about the athletes. >> that's what it's all about. >> this is true. >> supposed to be. >> it is true. i had not thought through the

implications of the athletes. >> that land mass -- >> the d.c. politics of this now. >> what other thing is there? >> pretty much. >> joseph? >> yes, there's stocks to watch. >> what else is there? >> stocks to watch. boeing hiring norsk titanium to print the first structural titanium parts for its 787 dreamlin dreamliner. the norwegian 3-d printing company says the move could shave 2 million to $3 million off the coast of each plane. toll brothers was upgraded to outperform from sector perform. the firm increasing its price target to 43 from 37. see, that's okay. it's not 37. yesterday we had that move yesterday, did you see it? they increased the price target on something, 325, and the stock was at 310. the old price target was 200. >> sounds like tesla. >> i think it was. this they're raising the price

target before actually hitting the old price target. and retailmenot agreeing to be bought by harland clarke for 3$355 million. harland clarke offering 1 $1.50 a share for the coupon provider, representing a 50% premium to the stock's close yesterday. coming up, profit versus purpose. that's the subject of new cover story of fast company magazine, they look closer at the zuckerberg playbook. the editor will join us next to talk about it as we head to break, a quick check of european markets right now. "squawk" returns in a moment. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient.

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oh. >> you're not a beneficiary. welcome back to "squawk box." facebook ceo mark zuckerberg is among the leaders in silicon valley playing an age-old game of tug-of-war. on one side there's profits, on

the other side purpose. it's the subject of mast money's magazine cover. want to bring in the author and editor. he is the author of that piece. you know, when you put yourself on the cover -- >> yeah. yeah. >> like is that -- >> you know people talk about nepotism as an issue. >> well, i don't generally write the cover stories. >> only when you have to go out and visit somebody like zuckerberg. >> yeah. >> just to finally, go back just to finally introduce the segment, you also talked to zuck but you talked to sales force and other companies airbnb, and the culture versus purpose issue. here's my question for you. >> yes. >> you have set it up as this battle royale between profit and purpose. >> well that veally what the question is, right? there is a dialogue, an emerging dialogue going on in corporate offices among leaders about whether purpose and values and you have to engage in them, and to what extept that can actually be ben fish to the financial

organization. i know may be sackry lidge to joe and some others. when you talk with mark zuckerberg he absolutely believes that the central purpose of his business is to make the world more connected. if you go back to the, what he called the founders letter that he issued when they first went public. he said we don't get up in the morning to make money. we get up to follow this purpose. but that purpose is what allows them to endear themselves to potential talent. >> right. >> new employees, to partners, to customers, and use their brand with a certain strength. >> but when we talk about purpose, is purpose to some degree a marketing arm or marketing piece of what -- any business is ultimately about? whether the constituency is you're marketing to our potential new employees? or customers? >> i think the way -- the way i like to think about it is every organization has values. some of those values are written down in value statements.

many more of them operate in the way an organization actually operates in the world. right? and you see it come out. if you look at the differences between the challenges that company like uber has had. >> right >> of late. right? they have -- they have -- when you operate in a way where they -- you are first and foremost saying what can you do for the world. as opposed to what the world can do for you. >> right. >> you engender what psychologists say is a kind of credit. >> what do you think the values of uber are? >> well, that's -- i think that's what purpose -- that is what uber's challenge. >> i can tell you that the purpose of uber is to disrupt the taxi market, if you will, and -- and potentially move people around in a more efficient way. i think that's legitimately their purpose, right? >> if uber could own that. could own the fact that we're making cities work better, we're improving climate change because people aren't driving around as much. right? if all of those things they could own that, that would work better for them. but they're having challenges with that.

whereas on the other side, airbnb which i think of as a sister brand in a certain way, they are all about belonging. you cannot run a company like airbnb without saying open your house to other people. >> right. >> and that imbues their company, and their brand, with -- >> i hate to be so cynical. why is that different than marketing? >> it's not necessarily different. when i talk to mark who runs sales force, he talks about the philanthropic activities that sales force is involved in and he says those are inextricably linked to the financial success of the company. they are one and the same. the culture of the company. the way they interact with partners and employees. again he says it's directly connected. and it drives their business. >> do you believe -- >> i believe that he believes it. i brief that the market believes it. >> i'm not asking you whether you believe it. >> i think within sales force it absolutely is the case. i think there are many places that do it just as marketing. and it doesn't connect. it doesn't connect with employees. it doesn't connect in the same way. you know, this is -- these are the challenges that come up.

>> what is the mission and purpose of fast company? >> fast company's mission is to make business a vehicle for progress. have business people be the best versions of themselves. >> right. >> jesse eisenberg? >> i met mark zuckerberg. >> i like jesse -- he's a better mark zuckerberg than mark zuckerberg. i prefer jesse eisenberg's version of mark zuckerberg. so you didn't meet jesse eisenberg? >> not for this story, no. >> whatever. >> i'm sorry. >> great to see you. go out and get fast company it is a fascinating piece. >> thank you. >> thanks very much. >> coming up, cliff robins is known as the friendly activist. he's going to join us next talking markets, tax reform and his whole portfolio of investments. later north dakota senator heidi heitkamp is here. she's going to hit on taxes, trade. at fidelity, trades are now just $4.95.

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supermarket war, an activist investor takes a 9% stake in whole foods and suggests it put itself up for sale. today's guest host, the friendly activist cliff robbins of blue harbor joins us with his reaction to this story, and where he's putting his money to work for investors. that's straight ahead. plus, energy. the xm bank and the economy. and, the new supreme court justice. senator heidi heitkamp joins us in studio to discuss the latest out of washington. and sky high outrage. both customers and investors demanding answers from united today, after a viral video shows a man being dragged off an airplane. as the second hour of "squawk box" begins right now.

♪ live from the beating heart of business, new york city. this is "squawk box." good morning. welcome back to "squawk box" right here on cnbc. we're live at the nasdaq marketsite in times square i'm andrew ross sorkin along with joe kernen and kelly evans in for becky today. take a look at the futures. a bit of a roller coaster yesterday. we ended up unch but boy did we go up and down. dow looks like it would open up are nasdaq up 2.5 points and the spund down just margely. the activist investor looking to shake up the board and senior management of that grocer. they want the company to speed up the turnaround and improve its options, including a possible sale. shares of the high end grocery chain have lost nearly half

their value since peaking in 2013. we're going to get some reaction to this story and talk activist investment in just a minute with our guest host. can't believe they're losing money. not losing money -- >> talk about whole food? >> have you been in to whole foods lately? >> i have. >> eh. they need some investment. >> well maybe cliff robbins can help. >> whole paycheck, that's good. >> you never heard that. >> no. i don't -- >> whole foods, whole paycheck. >> we used to get a turkey there. because they'll do your turkey. >> they will. they'll do up a turkey. >> yes. you just get it. and throw it in the oven -- >> you never heard whole pay check? >> no, but i like it. >> whole paycheck. >> that's -- >> they're having marketing problems. in the meantime separately the battle between qualcomm and apple is continuing. qualcomm countersuing the iphonemaker in a dispute over licensing fees for mobile technology. the chipmaker accuses apple of interfering with royalty payments. this comes less than three months after the iphonemaker had

sued qualcomm for a billion dollars. the white house giving itself some wiggle room on the time line for tax reform. back in february, you will recall the treasury secretary mnuchin laid out an ambitious target for passing a tax reform bill. >> we want to get this done by the august recess. we've been working closely with the leadership in the house and the senate and we're working on a combined plan. >> now, press secretary sean spicer says officials are still hoping to pass tax reform by the august recess but they're going to make sure they do it right. spicer's comments came after the ap report that president trump has scrapped the tax plan he backed on the campaign trail and working to find a new plan that could get enough broad support to pass. and that is what may have moved the markets yesterday. so frankly, gary cohn last friday made similar comments -- >> and the white house denied it yesterday. anybody knew that -- >> looking hard. >> this is a challenged issue. >> the point is not when. just maybe some day hopefully

after obamacare. i mean, it's -- >> you're saying it's gone from a when to an if? >> i'm -- >> i -- >> you know, deep down i think that they're concerned that if you can't get one party to agree on something. the other party is not going to help. that's obvious. but you know, the other party is the one that's in office necessarily to play. i don't know. >> why we got to talk to heidi heitkamp. >> i don't know what party she's in. but they're going home, these guys, and maybe they're going to hear some things. i bet some freedom caucus guys hear some things and i'll bet you some moderates hear some things. and then there's going to be plans where they're democrats going to republican town hall meetings as well stirring things up. >> but if it's not going to be a gop bill -- >> if you're out on any given day, you could -- >> don't look at me. >> you know. we've never physically removed anyone from this set but that's possible to do that. >> we're going to talk about passengers on a plane?

passengers on a plane physically removed. >> the show is overbooked. >> the show has been overbooked. >> you know some guests have felt like that for sure. >> all right. this is -- it's not funny. but it's in fact, it's sweeping the country. everybody is talking about it. this is your water cooler story. >> thank you. >> united airlines responding to a social media firestorm after a passenger was dragged off of one of the company's planes late sunday, and like so many things, there's not just one video. we got angles. we got close-ups. we got, you know, probably ten videos out there. it shows the faengs on the united flight from chicago to louisville being forcibly removed before takeoff. the flight was overbooked, but also suddenly they needed four seats for united employees that needed to get to a flight -- >> the ceo calling disruptive -- you can't call the customer disruptive and belligerent. >> but if he was they should make that clear right now.

they should lay out exactly what he did. >> there's other times where it's not based on an overbooking or getting -- someone is doing some crazy stuff. >> oh, yes. drunk. >> or whatever. remember what the guy did on the tray table that one time? >> yeah. >> he was totally drunk, and he -- >> yeah. >> remember? >> i do remember that. >> you would want him off the plane. >> that's why you look at the response from the other -- >> if the other passengers would tell you about this whole story, if they had all been going man, boy i'm glad -- they're all screaming, what are you doing? >> in an e-mail to employees last night obtained by cnbc, ceo of united os consider munoz said employees in his words followed established procedures. he called the passenger disruptive and belidgent. munoz said the company could learn a lesson from the incident but said he emphatically stands behind his employees. >> it wasn't united employees who dragged him off the plane. >> right. it was -- >> it would have been the gate agents or whoever those officials are. >> the police -- >> it was just united's

responsibility to deal with the situation. >> -- i mean whoever wrote that for him, i hope somebody wrote that for him. >> if he wrote that himself -- >> or at least explain why. what was happening? that's the missing piece of all this. >> he's walking around backing his employees. >> certainly. >> from the pr nightmare that they're involved in. >> unfolding. meanwhile today the white house economic advisory group which is led by steven schwartzman is due back at the white house. let's get down to kayla tausche with a look at what's on the agenda. what are they looking to get out of this today? >> they're going to be discussing infrastructure and tax reform specifically. it is the second time the group is convening at the white house since it was announced in december. and here's how the day will go. steve schwartzman, ceo of blackstone, he chairs this group, and the ceos of gm, walmart, ibm, tesla, pepsi and more are set to attend. they're going to begin with breakout meetings. small group meetings with the leaders of the budget, transportation, education and commerce departments as well as the epa. then they're going to have a larger group meeting where they

will likely be discussing this altogether with the president. it's one of the dozen councils, working groups, listening sessions and task forces that president trump has assembled in his first 100 days. this is the strategy and policy forum but these meetings have ranged from airlines to retail executives. i spoke to six attendees of these meetings many of whom took similar meetings with the obama administration and they say trump is more engaged in the content but the meetings lack the urgency of the recession. the multinationals attending are global companies with diverse work forces but ceos have told me they worry the views they share will lose out to the economic nationalists on trump's team. press secretary sean spice iraddressed the ideological infighting yesterday. >> whether it's this, health care, tax reform, trade, he's got a diverted set of opinions here of experts. the idea isn't to have one set of thought and policy flowing through there.

>> but since the president himself dongt follow a clear and predictable ideology ceos have told me in private they're not sure exactly what the meetings will yield. it is still early in the process. andrew, i'm sure you've had similar conversations. these executives are happy to add to the marketplace of idea but they're really not counting their blessings or counting on any policy that they would like for their businesses just yet. >> okay. kayla tausche in washington, d.c. thank you. >> you want my whole paycheck. >> she's known as the friendly activist. the friendly guy who is right with us right now with more than 50 core investments over twelve years blue harbor group has never run a proxy contest, sued a company or sent poisoned pen letter. our guest host for the hour, founder and ceo of blue harbor group. we appreciate you being here this morning. we always do call you the friendly activist because you haven't pursued some of the measures that we talk about, including the whole paycheck, whole foods, and putting up a

slate and the like. one of the things people do talk about these days is the idea of peak activism. that it's so much harder in this day and age to successfully pursue and activist approach, in part because so many companies and ceos themselves talk about themselves as being internal activists. they say we're doing it ourselves. how much harder do you really think it is? >> i don't think it's much harder. i think in fact it's pretty easy these days and that's because of the sea change in corporate governance where boards and ceos listen to their large stock holders. it's true that many companies are intro expecting and trying to improve value themselves. >> when you look tell performance, dare i say of many activists and i will exclude you from this just for a moment but even bill ackman, famously, by the way, talking about getting passengers off, he has an ejector seat. you know this? in this office he actually has a seat in his board room in the corner that is like a physical

seat -- >> they can stand up. >> no, no, no. >> physically -- >> no, i know it has a button. it's from a plane. >> oh, yeah. >> but you could be ejected -- anyway we were talking about this. >> he should have ejected valiant position. >> but when you do look at the performance of activists these days they have struggled. you could argue to the extent that there has been success it has large part been the investments outside of straight activi activism. >> i would say every firm is different. everyone has a different approach. i think that, you know, investing is hard. and not everyone gets it right all the time. but i do feel like there's a tremendous market inefficiency that activists are pursuing which is the ability to take large companies and affect their direction without paying a premium. and that is a significant market inefficiency. >> right. what do you make of this whole foods attempt by the wa >> you know the supermarket business is a hard business. i was on the board of stop and shop for years. i know the business really well. not whole foods. i think it's a tough business.

this particular company from my knowledge is undermanaged. and i think john has got diminishing ideas there about improving operations. i think it will likely be sold. there's a lot of m&a brewing and i think companies like albertsons and safeway will take a hard look at whole foods. >> do you ever get involveds in things after an activist has made a public play? meaning would you ever ride the coattails, dare i say, of somebody else doing this? >> likely not. i mean we have very, very rarely done that. likely not. we typically invest in companies that we've developed relationships. we've built an understanding with the board and companies that we'll be pursuing on our own nickel. but we would look at something. >> right. >> i want to talk about some of your positions. before we do that we talked about a little bit of the roller coaster ride the markets were on yesterday. i know you look company by company in a very micro way. but from a macro perspective, if you will, how much of the policy of washington, steve schwartzman's in washington today with that group of

executives, and tax policy, infrastructure, repeal or not of obamacare, how much does that factor into your thinking these days? >> it does factor in. and i think it's factoring into the market's thinking. the market is expecting some level of tax reform. i think that's going to be important. i think we're going to get that. >> what kind of premium do you think already exists in the market for tax reform? >> i think the market has realistic expectations that we're going to get some tax reform. i don't think the market's pricing in a huge 15% to 20% rate. i think the market is probably pricing in some tax reform, and some repatriation. >> we have this huge path of investing, blackrock holding a huge portion of a lot of these companies. when you want to shake something up do you have a hard time knocking on their door and saying to them we need you to back this? here's the facts of it, you know, please vote our way? do they have the resources to deal with every activist proposal that comes by? >> i think that companies are much more receptive to listening

to large stock holders -- >> companies are. but what about the other shareholders who might actually be passively kind of blocking what you want to do? >> so in our -- >> talk to the robots? what are you going to do? >> in our way of investing, since we're, as we in the lead-in, friendly only, no proxy contests. we're not talking to other stockholders, we're trying to convince management teams that our ideas make sense. >> there's never a campaign -- >> there's never a campaign. we meet a management team and they're not open to change and they don't see the value and we can't convince them. >> you don't have conversations with companies, you're not out there talking to other investors trying to either mount a little bit of pressure, even if you're not going to pursue it on a hostile basis? >> not at all. we want to have our relationship with the board and the management rf the company and our secret sauce is getting to know these folks, deciding who we want to back and convincing them of our ideas or we love it when a management team says to us, your ideas are not so great. we've got a better idea. we're very much focused on, like private equity, which in my experience, investing with management team. >> let me ask you, i'm thinking

about nelson peltz's investment in general electric. he goes in in that instance as a friendly investor. says i'm going to back you, i'm going to put my good housing seal, nelson peltz housekeeping seal of approval on this. a year later they miss their numbers, which they had clearly committed to, and i imagine committed to peltz, and now he's in a bit of a bind. how often does that happen? you go in -- they claim they're going to be friendly with you. they're going to do what you want and then they don't execute? >> it wasn't happened a ton but it has happened a few times. one of the things i like about our strategy is we're investing for two, three years at a time. not two or three months at a time and it gives management time to change. that's why i put such a premium in the management team. if you're investing with somebody who is smart and hard working, they have projector capital when things are unexpected or making money when things go well. >> can we talk about webmd for a

secretary? >> sure. >> what's the state of play? >> it's a big investment. we own 9% of the company. it's a really cool company. it's doing two unique things. most know the consumer webmd. 75 million users. we go on the website to find about health and wellness. the larger part of webmd is a company called med scape where eight out of ten physicians around the u.s. and a lot of times around the globe go to webmd for education, learn about drug interactions. this is a very, very valuable business. what webmd is doing now is exploring alternatives and may sell the company in whole, in pieces, maybe independent which will be fine for us, as well. i think there are companies that are very, very important nexus of the web and health care. >> you would be satisfied if they announced tomorrow that they would stay independent? don't you think the stock would fall 10%? >> it could. and we might buy more. i think it is likely the company will be sold. if it's not, we're big believers in the future of this company and the interest and wellness and health care and the nexus of the web and if a company does not get a superior offer, and

they want to remain independent we'll back them. we might have new ideas of ways to unlock value and different business models and ways to distribute their product but i think there's a lot of ways to win here, independent or sale. >> we're going to get to a couple other names a little bit later. before you go, how often do you approach somebody and then decide they're not going to play with you? >> many times. many times. i mean, many times -- >> more than 50%? >> many more than 50%. many more. we meet lots of companies, invest in very few. and it's not just because they won't play ball with us. a lot of times we'll meet a company and say we're wrong. this company is not as undervalued as we thought or a structural impediment, the idea to unlock value. one of the things i like about our collaborative approach we get to know the managers before we invest. we invest in very few instances and much more than 50% of the time we meet a company and we decide it's not investable at this time. >> okay. cliff robbins, stick around. coming up, the biggest 500 hedge funds. well, they hold about $50

billion worth of eft securities. a look at why hedge funds are betting on these baskets of stocks, and then later senator heidi heitkamp joins us. she'll be right on set with us. we'll talk the xm baumg. also the president's plan to spark the u.s. economy. she's in a really red state, and makes things a little bit different. "squawk box" will be right back. briathe custer app willw i be le mond. can we at leasanalyze stomer traffic? n we push the offer online? brian, i just had a quick question. brian? brian... legacy tecology can handcuff any cpany bu"y" is here. u're saying the new app will go live monday?! yeah. with help from hpe, we can finally work the waye want to. with the right mix of hybrid it,

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sign up for netflix on x1 today and keep watching all year long. welcome back. hedge funds are utilizing efs, exchange traded funds in a big way. the biggest hold about $50 billion of etf securities. leslie picker has more on this trend. she's here this morning with, it's interesting that the activists have so many of these what you think of as passive holdings. >> exactly. i was interested in learning that, as well. in the ongoing assault over asset management, over high fees and underperformance, the hedge fund manager lee cooperman had this to say last week on cnbc. >> alls i know is if the ability to underperform exists, the ability to outperform also exists. and warren buffett, and stan druckermill, didn't get to their net worth by buying at index.

>> that may not be how cooperman made his fortune. but after bunching the numbers it's more clear that securities are more prevalent among hedge fund holdings. it has been increasing to about $50 billion at the end of 2015. a decade ago it represented 1.6% of assets. last year it was twice that proportion and some managers have a majority of their portfolios invested in etfs, now funds use passive instruments in various ways whether it's to make directional bets on macro situations or balance out a short position. others use them as liquid securities to sell in the event they face redemptions which has been a common request these days. guys? >> that's true. is it that they're passive etfs? you rook at the kind of etf products they're creating and there's one for every possible flavor, strategy or type. are they using it to execute their strategy or something totally different? >> a lot of them are index based etfs.

where they'll follow and track an index, so if you wanted to make a bet on the direction of the french election, for example, you would buy the index that you think best represents that style of investing. so it's kind of a combination. the most popular ones, though, are those broader index etfs. >> you own any -- cliff robbins is here. you own any etfs? >> no. >> not part of this trend? >> an activist investor. a true activist investor. >> i think etfs, because they're so liquid allows managers to have excess cash who want to have investments in the market or be short the market to quickly take those positions. >> leslie, thank you so much. >> thanks, guy. >> coming up, senator heidi heitkamp on the president's economic agenda. we'll talk the xm bank, energy policy, much, much more. "squawk box" is right back.

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when we return senator heidi

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good morning and welcome back to "squawk box" here on cnbc. we're live from the nasdaq marketsite in times square. and among the stroirs front and center today, toshiba filed its twice delayed earnings report without an endorsement from the company's auditor. the company has a disclaimer from price waterhouse cooper saying it was unable to form an opinion. the move is unprecedented for a japanese company and increases the likelihood toshiba will be delisted from the tokyo stock exchange. semi getting slammed in europe this morning. analysts have downgraded the stock to sell saying there's strong evidence apple is developing its own power

management chip, replacing ding dialog's. vizio is facing financial troubles with reports saying leeco has had issues paying employees and investors. >> trade was one of president trump's biggest priorities on the campaign trail. both without a fully staffed export-import bank which dates back several years. key pieces of the trade picture may be missing. joining us now senator heidi heitkamp, democrat of north dakota who is behind legislation to reauthorize the export import bank. this is a, like so many things, an issue with people that are very sure of themselves on both sides of the issue. you think we need this to compete -- >> oh, absolutely. we actually -- >> other companies and countries around the world -- >> but, joe, you know we reauthorized it, with super

majorities in both the house and senate and because of one guy we don't have a quorum on the bank. so we can do any deal under $10 million. we just can't do a deal over $10 million. what people don't understand is they always say the bank of boeing, ge, caterpillar. those guys are assemblers. so there's tons of people in the supply chain in little towns in north dakota, all across the midwest. the state with the highest amount of suppliers into boeing is texas. this is critically important for jobs, it's critically important for exports. if you could wipe out all export finance agencies, we do fine. but we need to be competitive. >> seems like something that maybe treatdom caucus might be against, but something that trump probably would be for. >> well you know when i visited with trump in december, with then-president-elect trump i raised it. he had just done the carrier deal. i said hey you want to take credit for 170,000 jobs, i know how you can do that. you can reauthorize the eximbank.

>> what was his response? >> he said i'm for it. i used to be against it -- >> that was a john kerry invitation. >> oh, no, no, no. he explained that after he found out that there were jobs leaving that he was concerned about those workers and every time i've seen the president since then i've rised the eximbank. we know they're moving on some nominees. we're hoping in may we'll get this done. >> quickly talk, return to this if we want, but i want to get, i don't know if you're on the record talking about justice kwors up right now. and people, cynical people say you're in a red state, that you're going to be up for re-election, that was what was behind your vote for gorsuch. or was it something else? was it that you thought he was a judge that should have been confirmed by the entire senate? >> i think the great frustration that people have in america is elections have consequences. and when all you do is obstruct, all you do is say no, no, no, i mean i judged him not based on what happened to merrick garland, which quite honestly was atrocious.

it was appalling. i didn't judge judge gorsuch by that. i judged him by my interview and my review of his record. and would he be the judge i'd pick? no. never. but he is the judge that the duly elected president picked. and i think that we have enough politics in the executive branch, we have enough politics in the congress, let's try and figure it out. >> have you been back since? >> i have. >> and? >> there's a lot of people disappointed. a lot of people walk by in the coffee shop and say thanks for your vote. they're tired of partisanship. and one of the things that we demonstrated. one of the big major decisions is we ended up doing something that i think we will regret now for the rest of -- the rest of the congress, and that is making sure that no judge will ever require 60 votes. you know what happens then? you end up with people who represent either end of the political spectrum. >> justice. because we know -- we were already -- >> you're precise. always joe -- >> in 2013 with your party.

it started. >> oh, you know. >> well -- >> no -- >> all judges before. but the only thing left was supreme court justices. >> well and that's a pretty important job in >> that's a slippery slope. >> yeah. >> but strategically you think the democrats in that instance made a mistake then? >> yeah, i do. but, you know, i'm not in charge. and that's above my pay grade. >> how easy or hard is to communicate and articulate that to the american public? sort of strategy, if you will, that goes in to how people vote relative to these issues? >> i don't know that you need to articulate a strategy. i think what you need to articulate is that we're trying to work together, elections have consequences. this was somebody who was qualified. you may not agree with every one of his decisions, but for instance, something that didn't get talked about, he was endorsed by the national congress of american indians. because of opinions he had written on sovereignty. which is pretty important to me. >> i want to ask you, senator, about something else. i invest in mostly u.s. companies and i'm very concerned about the health of the workforce. and i understand you have some

interesting ideas about opioid problems. >> well i'd love to take credit for joe's ideas. joe mnuchin idea. but i'm full-on, full-throttled supporter. if you look at the trajectory of opioid abuse in this country you will see a direct relationship to prescription numbers and to the abuse. we're saying one penny for one milligram of opioid prescription would lead us to over a billion dollars a year. that's how much actually being prescribed. we would put that money in a fund. but the one thing that we have to do is we have to look at the new science around addiction. and we have to think about, it used to be the twelve steps, you're done. we know that medically assisted treatments can be very effective. it's emerging as kind of a new strategy. we need to look at different strategies for addiction. we're doing a lot of work on trauma in my office. making sure that we treat trauma very early on. children who have experienced trauma, four or more instances of adverse childhood

experiences, much higher rates of addiction. >> so we're working on trauma. >> i just think it's an important thing. it's important to the pension funds that i represent. and i'm glad you're taking leadership on this. >> public health challenges, whether it is obesity, whether it is the opioid thing, those are major challenges to the workforce of the future once we figure out what that workforce needs to know. you know, another thing we're working on is kind of 21st century what do jobs look like in 20 years. and i think this automation analysis is -- has to be paid attention to right now, especially by educators. >> senator, tax policy. >> yeah. >> we talked about the roller coaster the market went on yesterday, in part because of comments from sean spicer that potentially we may not get a new tax policy before august the way the treasury secretary had suggested earlier. map it out for us. do you think there's a chance that we see a tax policy that's voted on and approved by then? >> i think it's interesting. because we just met with gary cohn and we said what's on

the -- what's on the table? and i liken it like a funnel. so, is the recommendation here? or is it up here in the strot os fear? and when you look at it everything's on the table. so it's a long way from getting to everything's on the table to the proposal that will find its way in to the discussion in the congress. so i think we're a ways off. >> you're not optimistic that there's going to be a tax plan? >> no, i mean i think that the first debate we're going to have, the fundamental debate is are we going to pay for it? if we're going to pay for it with a border adjustment tax the answer is no, we're not going to get it done. everybody says it's going to be revenue neutral. i'm an old tax collector. that's what i did in north dakota. i used to laugh when people said that. said it might be in the number that you get from cbo, but per taxpayer it's never revenue neutral. and all those people who are going to lose, if you get rid of interest deductibility, if you look at exchanging that for expensing, all those people are going to lose are going to be the people knocking on the door

in washington, d.c. saying don't do this. >> that's the view on the democratic side. but where do you see the fault lines within the republican party on this issue? >> i think on the border adjustment tax is huge fault lines. people who represent major retailers, take a look at tom cotton who has walmart in his state. he's not going to agree to the border adjustment tax. >> do you think that the -- >> i shouldn't speak for him. but i would -- >> what happened with gorsuch, you think that that did certain democrats get it out of their system and now they're ready to talk about something? >> why do you blame democrats? >> okay, because democrats at this point you got nobody -- okay, but at this point, will it be no we're never going to do anything? or we made our statement about merrick garland now we're ready to work on tax reform? >> i don't know. i think tax reform is a little tougher. if you said, could you do tax reform with a major infrastructure piece? i think the answer is yes. and then we're talking about inversions and we're talking about, you know, repatriation, deemed repatriation. phony pony, maybe.

>> you gave a great vote for private sector infrastructure, and giving you kudos for that before with keystone. >> well i've long believed in keystone. we've got to have an energy infrastructure in this country that moves energy where it needs to be. and a lot of our pipelines are aging. a lot of the distribution system you have here in new york is aging. so why aren't we replacing that? we're replacing that because there is a leave it in the ground mentality that is dangerous to the infrastructure -- >> i discussed my question was for infrastructure or tax reform, are there only three democratic senators that you can count on, only because they're in red states? or will there be more -- be more bipartisan, at least conversations, about tax reform? because that's something supposedly even obama wanted to do. >> i think if you go back and take a look, ben cardin has a really interesting proposal. ron wyden's been working on this. all of the attention's really been in the house and with speaker ryan who wants to do this with a 51-vote majority. i don't think that's going to happen.

i think we're back to the proposals that you see being discussed and analyzed in the senate finance committee. >> i don't see how the freedom caucus goes for like 28. i don't think they'll go for 28. >> 28? >> 28%. >> i think they're going to want 25% -- >> -- to pay for it. >> that's the problem in washington. >> what's that? >> perfect is always the enemy of good. i want it may way or no way and that's what we get is no way because people are too busy thinking about my way. >> real quickly on the level of the dollar. you still concerned about it? obviously the border adjustment tax could go way up -- >> number one i think this assumption that we're all going to blindly believe that the dollar's going to adjust and my diapers will still be cheap is craziness. but for me, i'm very concerned about dollar values because of commodities and that's what we do in north dakota and we're very concerned about what's happening with agriculture. >> final question, they want us to end. we've got to get to commercial. but, the air strikes last week, which was praised in large part

by many democrats, did that change at all the dynamic with which both parties are interacting with each other? >> i don't know. you know, what you see is this kind of -- because everything's been so centered on the white house. what you don't see is the day-to-day sit-down, let's work it through, in the congress. and i think both the armed services, and the foreign relations committee, led by people who really want to see consensus in foreign policy, you know, bob corker, and john mccain, hopefully, that narrative will shape up, and will actually see a syria policy. >> no announcement from you about the lieberman move or an angus king, baby steps? you're not going to -- you're staying with this party? >> i'm not telling you. >> you're staying with this party. >> why don't you just -- you assume you know every democrat in the country. >> i was just asking. >> there are democrats in the middle of the country -- >> i just was asking whether there was anything you need -- >> really? thank you. >> the one and only senator heidi heitkamp. coming up when we return, stocks to watch ahead of the opening

bell. take a look the futures up. "squawk" returns in just a moment. man. to anticipate is lexus. experience the lexus rx with advanced safety standard. experience amazing.

coming up, doing good while doing well. we're going to look at using environmental and social governance factors to invest. which companies fit the profile and what the impact on your portfolio would be. that's when we come right back. keeping an eye on futures, of course. markets have been missed. we're trying to get into positive territory. dow still down four points, nasdaq down two, s&p down 2 1/2. "squawk box" will be right back. >> investors, start your engines. executives from maserati, cadillac and porsha join us live from the new york auto show. we'll talk trends, gadgets, and the state of the auto industry. coverage starts at 6:30 a.m. eastern time. that's tomorrow right here on "squawk box." be live monday.ill can we at least analyze customer traffic? can we push the offer online? brian, i just had a quick question. brian? brian... legacy technology can handcuff any company.

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welcome back. ethical investing may bring more than just good karma. our next three guests are ranking environmental, socialist and governance factors. at the top of their list of criteria for investing in companies. joining us michael garland, assistant controller for governance and responsibility investment for new york city pension funds. simon, managing director at hull capital and our guest host for the hour cliff robbins, founder and ceo of blue harbour group. cliff, this is important to you guys, there's, you know, growing momentum behind it even while people also maybe it's just me kind of roll their eyes at the same time. why is this such a priority for you? >> it is hugely important. i really think we're in a new

paradigm for successful investing. you must take into consideration environmental, social and government factors, and i think they're going to be critical for success. they're important, we're really at a tipping point. around certainly at blue harbour we're integrating that fully into our investment process. >> michael, what does this mean for you? does this -- does it mean people you can't invest in? or do you create separate funds that are sort of green -- >> no, actually quite the opposite. so i work for the new york state controller who overseas new york city pension funds, $170 billion. half of it is in public equity. we own about 10,000 public companies around the world. around 3,000 companies here. very long time horizon. largely through index strategy. we have concerns that the board or a company's environmental practices or business practices, we can't walk away. our only way to protect and create value is to work with our companies. >> for the whole pension. not just one piece of it? >> well, half the portfolio is in public equity. yes. >> but ultimately the whole thing.

often because "e" is the first word you tend to maybe again just put emphasis on the environmental aspect of this. gut governance is really important, as well. so but it's almost so general. i mean isn't good governance important? what are the quantifiable factors you're talking about? >> well, we want companies to be sustainable. that means good governance, good management of material risk. environmental, social and governance risks are among the material risks that companies have. and if you have four or five companies in your portfolio, you may get very involved in all kinds of business decisions. we don't have that capacity. so we want to make sure we have the right board. that they're overseeing the right risk. and that they're providing investors with information so we can assess the performance of those risks. >> you have $30 billion under management. what's your strategy or your approach on that? >> so, our business is a little different. we're an outsource chief investment who wasser so we're not holding the assets directly our clients are. but we're out trying to find

what we think are the best managers across asset classes. so our industry does not need another acronym but we coined full consequence investing, fci, three or four years ago, which i think appropriately incorporates a variety of long-term sustainability factors that we expect our managers to apply to whatever it is they're investing -- >> what makes this different from a normal standard investment process? give us some examples. >> a lot of it depends on the time horizon. cliff was saying this earlier. for really long-term investors, private equity is probably the most obvious. public equity, too, but less so in bonds and other investors. you know, those gompance factors can be environmental. they can be gender equality. they can be knowing your customer. >> so would you not invest in google? because a report comes out saying they pay men more than women at their company? >> bought we're not investing in individual companies as a -- >> that's a dodge. but -- >> dodge but it's true.

here's another dodge. in our firm, so we're a 20-year-old investment firm, we have 16 partners. eight are men. eight are women. that's super unusual in our industry, as you all know. it's been a great competitive advantage for hiring women out of business school and earlier on in their career. also been a great competitive advantage building our business. >> all that may very well be. i'm going to put the same question to cliff because he actually does invest. if you had a view about google, meaning you -- a view, a positive view about where that business was going are but you looked at the makeup or mix of the talent, if you will, on a gender basis or something else, would you say you know what? i'm not in. >> absolutely. this is -- you know, it's a real significant way to reduce the risk, by identifying companies that are going to be -- run into problems. if a company is not probably its employees, isn't about equal pay, doesn't have women and minorities on their boards, isn't good in supply chain, isn't good on safety, if they're

not properly assessing those risks, i wonder what else is in the business. so i think from an investing standpoint putting companies through an esg lens is important -- >> absolutely terrible. if you ever look at apple at its absolute height under steve jobs, you could make the argument that the people that were around the table were effectively four or five white men. that's what it was. are you saying that if today, in retrospect, given the success of apple, that you would not have invested in apple because you would have said that's too high a risk? if we could pull this time period forward. >> all i can tell you is when i meet with a company today and i look at on one hand the fundamental business, the valuation of some of the play, the strategic value, the balance sheet all the things i normally do i'm looking at that company and also asking the tough questions. >> i'm just asking -- >> -- find a company where they don't have the right answers, they're not thinking about things the right way, and i

think it's significant risk in their judgment around these esg issues, it's a reason we might not invest. or we would invest because we're going to own 5% or 10% of the company and take on our responsibility to improve that company. hold them accountable. >> here's the opportunity to go company by company. but when you have a much bigger portfolio and much broader set of holdings does it end up just, you know, being sort of a tactical play, somewhat around the edges, that maybe trips the overall performance a little bit but doesn't give you -- you kind of check the box. >> well, actually we're seeking to manage risk and improve performance. let me speak -- we would agree about the risk and gender pay equity is a good issue. rather than walk away what we do is engage. last week the controller put out a press release we reached agreements with six major insurance and health care companies to improve their disclosure around gender pay equity. i point you to the proxy prudential financial which said they concluded they have no significantly statistical gender

pay gap. if we have concerns and focus on those industries because there is a large gap and it's pretty wide, we'll engage. similar with forward diversity. poor governance is a risk. if you have a very well performing company it doesn't mean you're not concerned about the quality of the board, the diversity of the board. >> we have to go but michael, thank you for being with us. mr. robbins, thank you so much. >> this is fun. come on back. >> what's a skuppy? that's socially conscious -- >> no acronym? >> i don't know. i don't even know what that is. my twitter feed is exploding. coming up fight in the sky. united ceo oscar munoz standing by his employees after public outrage after an incident over a flight over the weekend. what the airline is saying about the video and the gentleman who was dragged off the plane. plus the ceo's meeting with the president today. former michigan governor and former president of the business roundtable john engler will join us to discuss the president's policy and what it means for business. "squawk box" will be right back. .

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thithis is the new new york.e? think again. we are building new airports all across the state. new roads and bridges. new mass transit. new business friendly environment. new lower taxes. and new university partnerships to grow the businesses of tomorrow today. learn more at esd.ny.gov a power meeting in washington. ceos of gm, walmart and tesla head back to the white house. we're going to tell you what's on the agenda. more fuel to united's fire storm. >> look at what you did to him!

>> ceo oscar munoz stands behind employees after a video of a passenger being dragged off that plane goes viral. >> plus the one thing you can do to change the world. make your bed. a four star admiral tells us why as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york. this is "squawk box." you learn so much every morning. good morning and welcome back to "squawk box" here on cnbc. live from the nasdaq marketsite. in times square. i'm joe kernen. along with andrew ross sorkin and, seriously, i love becky, but you are so much fun whenever you're here. >> thank you for having me. i'm just glad it wasn't my vocal fry. >> i didn't even know what that was. did you know what vocal fry was? becky quick -- >> she's off this week. >> you've never heard of it? >> no.

>> kind of like futures right now. let's take a look at the board. >> almost a value -- >> kind of. >> like a valley girl situation? >> do you -- >> a little -- >> i wish i were better at it. >> all right. down 2.76 now on the s&p. dow jones down 5. the nasdaq indicated down 2. treasury yield, which i still think for me it's really interesting stories that we're back to 2:34 between. >> so low. >> don't know if we're headed to two or three. don't know what i'd put all my money on. to be that unsure of what i thought was for sure. that's a crowded trade going to 3. >> i was throwing -- >> were you trying to do a vocal -- >> you going to do a vocal fry? >> it's like down here in the vocal chord. >> yeah i like that. >> can you do it right now? >> among today's top stories, qualcomm countersuing apple in a

dispute over licensing fees for mobile technology. i don't know if that's any good. >> it's like an "snl" skit. >> thank you. >> i will pick up where she left off. >> this is your read? >> supposedly. the chipmaker accusing apple of interfering with royalty payments coming less than three months after the iphonemaker sued qualcomm for a billion dollars. also we've got some new data out this morning on the state of small business sentiment. the national federation of independent business said its monthly read for march showed a decline in optimism but still remains well above historic averages. and it is a light day for economic reports. not much on the calendar except for 10:00 a.m. the job openings in labor survey. >> in corporate news, jana partners raising its stake in whole foods to 8.8%. they're looking to shake up the board and senior management of the grocer. jana wants the company to speed up turnaround, improve its technology and operations and explore options including a possible sale. whole foods is up big yesterday. shares of the high end grocery chain have lost nearly half

their value since peaking in 2013. jana lined up some possible board nominees, glen murray, former harris teeter ceo ted kickson and former barclays stock analyst meredith adler. jana also working with diane december and well known food writer and entrepreneur and friend of andrew, have you heard from mr. bittman yet? >> i haven't yet. but i love the guy, mark bittman. former "new york times" writer and terrific, terrific food author. >> a consultant here for jana, all of these individuals bought shares in whole foods as part of the campaign. >> i just want to mention ivan the k. on twitter says you may be conflating vocal fry with something called uptalking. >> what is uptalking? >> i think uptalking is sort of raising the intonation -- >> like a british thing? >> like a british/australian situation. >> that's probably fair. ivan's on point. thank you, sir. >> joseph? >> yeah, i wouldn't know. >> let's talk about removing passengers from the plane.

>> i've been blocked for five years on my twitter. an update on a story that took social media by storm. united airlines is responding after a passenger was dragged off one of the company's planes late sunday. the video of the incident shows a passenger on a united flight from chicago to louisville being forcibly removed before takeoff. the flight was overbooked. but then again others are saying that the -- that wasn't necessarily overbooked but they needed -- came up with they needed four employ east -- four united employees needed to fly to louisville for a flight. they asked for volunteers. they offered $800. and then they picked people based on when you checked in, or what your flight status is, or whatever. but, it was funny because webster's or one of the dictionary put out what volunteer is. and you can't be volunteered by the company you bought the ticket from. volunteer means something else. anyway, they call them volunteers. but one customer refused to be a volunteer. and refused to leave the

aircraft, law enforcement -- >> a doctor, by the way, who said he had patients you needed to get to. >> i haven't seen that that's true. i don't know if it's true. >> that's what he said. >> he was claiming to be one. i don't know whether that's true or not. dragged him off the plane. in an e-mail to employees last night obtained by cnbc united ceo oscar munoz said employees in his words followed established procedures. when they removing the traveler. munoz called the passenger disruptive, and belligerent, and said that the company could learn lessons from the incident, but said he emphatically stands behind his employees. i wish we had -- >> could i say to oscar if you're watching. it's one thing -- it's one thing to support your employees and say that they followed the procedure. it's another thing to say we can learn some lessons. i think there's a lot of lessons that could be learned from this. and why -- >> or here's what we're going to do to make sure we don't put you into that situation again. >> we're going to look into this, try to figure out how to fix this. we don't ever want this to

happen again. there was no sense of empathy for the customer in this instance. >> but there's also just a lot of missing information about what happened with this passenger in the first place? and i wish whatever united can tell us about that situation would at least help flesh out what was really going on here. >> could have been, you know, could have been at the gate when all this probably happened in the first place. >> yeah. >> and there's ways of doing it. i see people that are on standby and slowly some of them are getting on. some of them don't make it on. but there's a better system. this is an antiquated system. >> what i'm suggesting, if this is the response from the ceo -- >> right. >> he could have made -- >> you could have -- i'm not saying you could have fixed the situation. but you could have made it better and i would argue he just made it worse. >> here's the thing. you're right by definition because of the pr hit that this company is taking right now. but you have no idea what went on before any of this happened. >> right. >> you have no idea about whether there was belligerence or anything else. >> right. but -- >> as i said you're right. by definition. because look what's happening right now. so that's what he should have thought of.

and that's where this comes in and where you need some slick pr person that lies for a living to come in -- >> you don't need a slick pr person who lies for a living. >> yeah you do. >> you need someone -- >> okay. but you know, but now to politics. president trump just tweeting, i explained to the president of china that a trade deal withle u.s. will be far better for them if they solve the north korean problem. he also just tweeted north korea is looking for trouble. if china decides to help, that would be great. if not, we will solve the problem without them. u.s.a. president trump meeting with the ceo advisory board today. executives from gm, walmart and tesla expected to attend. joining us a former michigan governor john engler. also former president of the business roundtable. and while we've got you here, governor, we've asked questions across the board to everyone, but for you i think we need to talk tax reform and what the

state of that is right now. would you be disappointed if it wasn't august? you think that eventually something absolutely gets done? will it be done in a bipartisan fashion? or will it be all republican and will republicans be able to agree? those are what the market's deelg with i think on a daily basis right now. those questions. >> well the first question is maybe can the white house agree. so can they get a plan or an approach that's agreed upon inside the white house to work out with the republican leadership, an approach. because it does seem to me there's been little variability in what we've heard. i hope this meeting today will allow the ceos, and there's differences among the ceos that will be gathered there, but i think there's no difference in terms of the consensus that we have to have tax reform if we really want to get the kind of growth that we have the possibility of obtaining in the nation. tax reform still is the number one accomplishment to get

economic growth, help put people back to work, and i think today is an interesting meeting. with the congress at the recess point are good time to take inventory of where we are, and how do we get a deal put together, and at the end of the day, you'd love to have some democrats. you know, reconciliation is there, but that's a ten-year deal, not a permanent tax code change. but boy, we would love to see it be done in such a way. and i think it can be done without busting the budget, that kind of depends on what they do with individual rates. but the business side of the equation, there's just so much commonsense and logic to get this done. and that trade tweet just a moment ago about china, we had tax reform right. it really helps out on the trade agenda. >> a lot of people watch this happen. but the world is cynical right now. >> right. >> and you wonder, some of these ceos probably wouldn't be there

if it wasn't for the power of the tweet, or whatever. when they go, are they -- have you ever had anyone come out and not just sing the company line that says wow it was great, we got some great ideas but come out, have you ever had anyone come out and say gosh, that was -- i'm just here as sort of a prop and i don't really agree with what i'm hearing? does that ever happen, governor? >> well, i think at the end of the last eight years there was almost difficulty at times getting people to go to the white house, because of that aspect. i think what you've got in the early stages of a new administration is still a lot of optimism, and i think on the part of the president, and the team. remember, this group met back i think february the 3rd. we didn't even have secretary mnuchin in office at the time. so we had a lot of -- we've got a lot of new faces that will be there this time. they're bringing the secretary of education in. i think that's terrific to talk about skills and the workforce because that's a piece of what the economy needs. so they're putting people around the table.

they've got these breakout sessions to start with. and then probably an hour with the president. the ceos, i think privately are saying, look, we'll take in the short-term some outcomes that are disadvantageous to our country, or our company, or our sector, but at the end of that process has to be long-term impro improved economic growth for the nation. that's the payoff. i think ceos and business leaders are frankly more willing to take risks than some of the members of congress who worry that if the short-term consequences aren't immediately visible, that's electoral problem for them. >> governor, you mention the tweets. suddenly we're talking about china trade, which is important in your domain, with the business council and everything else. and business leaders. it does have something to do with what happens in north korea. did you ever think you'd be in a

position where we're, in light of what happened with the tomahawk missiles in syria, i mean, this is something that doesn't seem like the normal ceo purview, but now it's actually part of our conversation every day. do you think ceos agree with a more activist, united states, and its role in the world? or is it going to hurt business? some people say it makes tax reform harder when we're getting mired in the middle east again. >> you know, that's an interesting question. it certainly hasn't been part of the, i think, business leadership equation in the past. although it's interesting, one of the strongest leaders of the business roundtable in the last several years has been rex tillerson. of course, he's now the secretary of state. so, business leaders are sensitive to geopolitical activities and threats and risks out there. that's all part of everybody's calculations. but i think the almost teed up kind of say, hey, we can do a

better deal on trade if china will help us on korea is a little bit novel. we haven't heard that. i don't know that anyone would know what exactly that means. i assume it means that we'll have a better relationship we can talk more. i don't think it means that suddenly china doesn't have to protect or respect the intellectual property of the u.s., or their trading rules can be rigged in their favor, versus the u.s. i still think the content of any deal has to be equitable on both sides, and there's a lot of room for improvement. i think most people would agree. >> yeah. i mean down the road, god forbid, god help us, but you know, if they can reach our shores with, you know, if a, you know, an insane person has access to something like that it would affect trade. >> no question. the north korean leadership is -- and i think we've seen a level of candor out of a number of people both on the defense

side, and throughout the government, about just how unstable this individual is in north korea. >> right. it's just amazing that that, you know, suddenly the sector of something nuclear is again in our -- in our discussions, and in our thoughts. and it's -- that would supersede everything. that -- believe knee that supersedes the border adjustment tax issue and everything else. >> it does, joe. it does bring you back to another point, though, that often is talked about, and you've had military leaders say this, that u.s. be economically strong is a way to have the strength that we need both militarily and diplomatically around the world. and we're underperforming there. so let's get that game up, and we're not dependent on any other nation to strengthen our own economy. that's up to us and our congress. >> and the economic problems in north korea are part of what this is their only, you know, this is their only path to any glory at all to some extent. governor, it's a complex world. dangerous world.

anyway. thank you. >> well we did this without being disruptive and belligerent this morning. >> yes, we did. and you didn't need to be removed. but you're on remote. we have no room on the set for you. we're overbooked on the set. >> bye-bye. >> 800 bucks is not enough. >> no i told you. there's a number. there's a number even for you. in fact it's probably less than for some other people i would think. >> yeah? someone's going to start a kick-starter campaign for one of us. when we return, the retired four-star admiral who oversaw the raid that killed osama bin laden says changing the world is at easy as making your bed. it's been a fascinating story and interview. he's going to tell us why next next. (burke) at farmers, we've seen almost everything,

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welcome back to "squawk box" this morning. what does it take to make a great leader? our next guest is a four star admiral who spent 37 years as a navy s.e.a.l. it all starts with making your bed. joining us is admiral william mccraven. he's best known as the man who oversaw the killing of osama bin laden. also the author of make your bed, little things that can change your life and maybe the world.

you can go on youtube for giving a remarkable speech that went viral talking about what it really does mean to be a leader. and we appreciate you being with us, and of course, for your service admiral. thank you for being here. >> my pleasure. thanks for having me. >> so, help us try to understand what this means. making your bed. it's the little details in life that you think make a leader. >> well, when i went through basic s.e.a.l. training the first thing you did every morning was you had a uniform inspection, and instructors would make sure that you made your bed correctly. and it wasn't just about making your bed. but it was about making it correctly. and i didn't understand at the time. i thought we were going through s.e.a.l. training to become hardened s.e.a.l. warriors. but the importance of that lesson was the fact that if you do a simple task every morning, it will encourage you to do another task and another and another. and also, it was the power of doing the little things right. if you can't make your bed right how are you ever going to conduct a s.e.a.l. mission? so the lesson was not lost on me that get up every morning, make

your bed, do it right, do it with a little pride, it will encourage you to do other tasks, and also it will show that if you do the little things right, then the big things will come later. >> let me ask you, we have lots of people in our audience who hire people, and they go through interviews, and they have interview questions. what do you like to ask people in terms of being able to identify great leaders? >> i always like to ask them how they deal with other people. i think the most important attribute a leader can have is respect for the people that work for him. you know, in the military you learn to be a servant leader. and this is -- it's your responsibility to take care of the troops, so to speak. and that doesn't mean, you know, that you make life easy on them. it means that you establish standards, that you hold them accountable. but you always have to respect them. and you have to earn their respect every single day. as a leader, you know, it is about making sure that you are doing the right things that you

are being moral, legal and ethical in all of your decisions, and that you're proig a vision for the troops. but at the end of the day it is about respecting the men and women that work for you. >> andrew i thought you were going to say we have people who hire other people to make the bed for them. >> that's true, too. i want to get some of your thoughts on the issues of the day. but the other thing that i was curious about is how this book came about. you did give the commencement speech to graduates that i mentioned went viral. is that how this began? >> it did. i gave it back in may of 2014 and i will tell you every day since that speech someone comes up to me and they tell me that they make their bed, thar that they've never rang the bell or that they don't back down from the sharks. but then they always ask me, you know, what was it that inspired you. and so i started to think about the people in my life that inspire me and the events that inspired me and i really kind of attach those events to the ten lessons that i laid out in the commencement speech in 2014.

>> by the way, i want to talk syria in one second but one last final question. there are people who are great at details, at executing things. but then that's a different talent oftentimes than it is being a great leader or having a great vision. how do you square those things up? >> yeah, i think you have to have a little of both. you know, you have to be able to set the strategic vision for any organization you lead. i don't care whether it's a small office or a large organization like the university of texas. my responsibility as a leader, as it was in the military, was you have to set the vision, you have to make sure again that you give the people below you the latitude and the flexibility to conduct their part of the mission, and then you have to rely on those people to provide you an understanding of the details. you know, the guy in charge or the woman in charge doesn't necessarily have to know the details. but they certainly have to trust the people that are dealing with the details. >> right. >> so you know the higher up you get, you know the less involved you are in the details. but i think the more important

piece of this is, you know, ensure that you have the right people in the right place to make the right decisions about the details. >> that's the old quote. you know, the world is full of very talented people that are unsuccessful because they don't make their bed. but the opposite, you can -- as long as you make your bed you can just be average and go a long way. i think, you know, i'm from cincinnati. i think of pete rose. not the most talented player. nobody is ever going to get 4,000 hits because, you know, you make the bed, he would run out every foul ball, every, you know, dive head first every time. i mean it makes up for a lot of talent. you can be average and be great. >> you bet it does. >> okay. admiral, we got to run. by the way, hospital corners? do you do them? >> absolutely. >> okay. >> i mean, that was one of the lessons we learned in training. you have got to do those hospital corners. >> all right, admiral, appreciate it. >> great having you on. "squawk box" will be right back.

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coming up, janet yellen raising a red flag about the fed's independence. the fed chair speaking out last night. we're going to tell you what she said when "squawk" returns in just a moment.

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♪ welcome back to "squawk box." we're talking books right here on cnbc. we're limp at the nasdaq marketsite in times square. stocks to tell you about this morning. another apple supplier getting crushed on fears it could lose a

country contract. analysts say there is strong evidence apple now developing its own power management chip replacing dialog's product in the iphone as soon as 2019 so that wouldn't be necessarily in the next version of the iphone, but perhaps the year afterwards. also disney added to the america's conviction buy list at goldman sachs. the firm citing the success of beauty and the beast. yelp upgraded from overweight. competitive concerns over yelp's reliance or relevance, rather, and reliance, i was cog to say reliance on apple, overdone. >> you do use your yoi feen. barclays ceo being investigated by regulators on both sides of the atlantic for breaking rules and trying to unmask a whistle-blower. wilford frost joins us for more on this story. >> yes, kelly. this all started when they hired tim main at the financial services group in new york

within the investment bank. main moved from evercore but had been a 20 year jpmorgan employee before that rising through the ranks with staley. worth noting that hire adds to a long list of high profile appointments by staley from jpmorgan. so much so that half of the executive committee at barclays are now former jpmorgan employees. so, when a whistle-blower criticized both main and the appointment it raised added questions about the morale amongst the troops of other barclays employees. either way a source told me staley's actions to identify the whistle-blower were driven more by loyalty than as a witch-hunt. and staley has said that my personal actions in the matter were errors on my part. chairman john mcfarland has said he is disappointed by the situation and that staley will face a very significant reduction in his bonus. now, given what happened to bob diamond, a fellow american investment banking trained ceo of barclays, i asked staley last

month if he feared that the british press and the board would one day turn against him? >> the reaction or the reception i've gotten from all parts of the constituency across the uk, from the government to people who run the branch that i live in has been terrific. i hope we do a good job. that's what we're here to do. but we'll leave it to the future to see what happens. >> thus far, says staley, unanimous confidence, but the external investigations into staley continue. we should also point out there's been no investigation initiated into tim main following the whistle-blower letter itself. guys? >> thank you, wil. by the way, do they say exactly what jes did, wil? >> so you're not allowed to search for a whistle-blower in the uk based on legislation and rules, and after he heard about it, he reportedly tried to

source who the whistle-blower was, and that's against regulations. there are various reports in newspapers about how that exactly manifested itself. but, i haven't been able to confirm. >> unmasking becoming a popular issue in the news. >> hmm. yeah. >> susan rice. unmasking. >> right. i knew it was from somewhere else. exactly. thank you, wilford. >> pleasure. >> wilford frost. >> janet yellen raising a red flag about the fed's independence, and saying the fed is on track to hike rates. steve liesman joins us now. hey, steve. >> good morning, joe. chair yellen upped the rhetoric yesterday in a brewing battle between the new republican congress and the central bank about how monetary policy was made at a university of michigan event yesterday yellen criticized two house bills. one she said would quote end independence and making monetary policy decisions, end quote by allowing the process [ inaudible ] right now almost everything else -- monetary policy.

>> i always worry about independence, and i think -- i think our macro performance is better, and the u.s. is well served by having a nonpartisan group shielded from short-term political pressures making these important decisions. >> another bill she said could go even further interfering with monetary policy -- >> end quote? >> yeah, thanks, joe. i got my mic on. >> is it working now? >> that bill requires the fed to follow -- folks try doing news reports with joe kernen around. >> they said it wasn't working. >> they got it now. it's good. it's all good. thank you now it's unclear how much support this bill has in the senate, or even whether the president trump this about them. he has been silent on the fed since taking office. while the yellen fed follows a slow, steady tightening, which she said yesterday would continue, and the economy seems to grow modestly it may be that the president has no complaints about the fed. it has been a lot of silence from president trump about the

fed. we're waiting for the vice chair of supervision to be appointed. there was a couple candidates whose names were out there. those names seem to have disappeared. he has three seats he could fill, or nominate today. if he wanted to. but no name on that. he hasn't said anything about policy. >> he likes -- i think yellen buys him a lot of coverage. yeah, i'll leave her in place, and oh, by the way, she's more dovish. it's not like that's something that would resonate on the campaign trail but with gary cohn in there i bet they know exactly what they're doing. >> do you think that maybe he asked yellen to stick around? >> i have no idea if they had those discussions. would i be surprised? not necessarily. >> i've heard that from a couple people. in that he doesn't have a definitive idea different from the one that yellen has. >> look, there's plenty of vacancies, if you want to appoint someone more hawkish, with more business experience, you can still do that, and keep her and kind of keep that consensus. >> i told you- >> he's a real estate guy and he wants to export things. do you need to know anything more than that? >> okay fine the next step is

what does he do with the federal reserve? >> i told you -- >> you stay at zero. >> well, okay. so yellen is good. >> no you know my view. >> i don't know your view. >> the real estate guy -- >> my view is gary cohn becomes janet yellen. >> and becomes more dovish -- >> and how does the market react to that? >> in a year from now -- >> you think gary cohn becomes chair of the fed? >> absolutely. >> how many times have you see the guy who heads the committee ends up being the one who appoints him or herself. >> i'm just saying. you got your name on the money. >> you see that a lot. you get out of the white house -- >> just be treasury secretary. >> well, but -- >> by the way now -- >> i -- >> part of that idea which makes sense to me is, openly this tax policy stuff ought to be handed over at the treasury. now that kevin hassett has been named there's a cea. so you're not going to really need gary cohn, what's nsc job is not doing typically what he's doing. he's been doing it because he's been the only guy in town. >> he's going to be chief of staff. >> let's get back to steve.

>> was your mic not turned on? >> joining us now are jonathan hurdle, executive chairman of hurdle callahan and company and terry simpson, multi-asset investment strategist at the blackrock investment institute. jonathan we could talk both picks, too. >> absolutely. >> always a good topic. >> you've got to think big so you can then be tactical in the markets, right? >> absolutely. >> what about tax reform. what about all of the stuff that's happening with the fed and where we're going from here? >> two things. first of all it seems like the federal reserve is actually looking to me to be willing to sort of withdraw from the focal point. you know, when they raised rates, you know, with inflation really core you're still at 1.7. it seemed like they're almost eager to get up there. hadn't really reached 2. i think they've been eager to try and normalize things and withdraw from the spotlight. as far as tax reform goes, you know the university of virginia has this public policy think tank and it is really the foremost organization in the world on studied american presidency. and last year they had a first year project where they had

former white house officials, and cabinet officials, write these two to three page essays on the first year. how hard it is. how important it is. and really, some of the same things that we've seen throughout history are being repeated. like, for example, you don't have your cabinet in place when you take office. number one. number two, a lot of stuff happens in the first year. >> hmm. >> bay of pigs happened in the first year. >> mm-hmm. >> 9/11 happened in the first year. so the first year is a really hard thing to do. lbj notoriously said you have one year to get things through, because after that congress starts to run for their own departments. so the likelihood that the president is going to get everything he wants through, is diminishing every day. >> so where does that leave us, terry? >> i think it's so important right now that a lot of investors are asking us where we stand with the trump trade and so we spend a lot of time thinking about the reflation trades have the trump trade and it's really important to differentiate the two. so the trump trade was obviously pro-stimulus, more fiscal reform, et cetera. but the reflation trade is more

about the cyclical improvement in the economy. >> and that can happen even if the trump trade stalls? >> we do believe so, yeah. that's some of the analysis we're doing right now. the trump trade is a bonus to the reflation trade but not a main determinant. >> what would you be in the reflation trade? >> more cyclical oriented investments, fixed income. we still believe in credit and thinking that things that are focused on the economy. there are other sectors that will benefit. but even if you look at the general market which is about 6% year to date yes there is differences within the sector. but we would say if you look at the overall market there's still strong performance. and that's indicating that most investors still looking at the better growth point of the story. >> you point out that they've been focused like a laser on earnings. he says you're going to be up 10% this quarter. he also points out that globally you have better earnings. yellen yesterday said we're starting to get some growth globally, look i have watched the reflation trump trade and the market move with it.

but it strikes me, there's additional buoyancy to this market that's separate from what's expected from the president. >> so as chief investment officers we want to draw a bright line between trading and investing. and at 23 times earnings, there's a lot of optimism built into this trump trade, or the lift coming from tax policy. so you're talking about an average return in the u.s. equity market that's been 6% real. at 23 time normalized earnings, which is the way we look at it. it's about a 4% projected real return. so u.s. equity market is very fully priced. the only way to really justify that going forward is if, in fact, you do have substantial tax reduction, and a different kind of an environment that allows -- >> but look at the level on that pure basis and you could say equities they don't look so crazy, right? >> absolutely. >> what else do you invest in? >> that's the key question as a chief investment officer. we're looking all around the world to find those sources of cash flow. u.s. equity market. that's actually still the 800 pound gorilla in the room that

the ten-year treasury is paying about a 50 basis point real return where historically it's been about 2.5. it's a fifth of what it has been historically. that's why the equity market is still better. vpg said that non-u.s. is a lot cheaper, both europe, japan and emerging markets than the united states. >> we got to go but terry real quick. >> i think what's important is reflation trade. it's no longer just the u.s. story, it's a global story. so i think investors should be thinking more global with their investment portfolio. >> no one wants to invest in u.s. everyone's in emerging markets. >> we maintain our u.s. position but we're finding better opportunity internationally. >> we have to go. but tomorrow i have the all-america economic survey, fascinating, fascinating opinions of the person public on the president and his economic agenda. >> tease us more. >> it's a really interesting survey. >> how many line backers? the all-american? >> all-america. >> america. >> not american. >> is that going to be on -- >> it's going to be -- >> on at -- >> where you going to?

>> he's -- >> be good. >> you do. >> real good. >> for most of the show here. >> what? >> all-america. >> thank you, guys. >> thank you. >> what's that other one you do all the time >> the cnbc fed survey. >> coming up, you guys, 3-d printing is going out of the lab and into the skies. the next plane you fly on might actually be built with this technology. we're going to go inside a factory where airbus parts are printed. that's next. stay tuned you're watching "squawk box."

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sfwh >> 3-d printing is transforming the way goods have traditionally been made. morgan brennan joins us now with how that technology is upending, you would think it would, manufacturing. morgan. >> hey, joe, that's right. so take a look at this. this is a piece of an air foil for a jet engine. it's made of nickel. this was 3-d printed in the machine behind me yesterday. so using traditional methods. you're looking at up to 14 weeks to make a full air foil. using this machine, about nine hours. now the end result also weighs less. there's really no wasted material. this is the reason ar conic is 3-d printing parts for planes. and why it's on the cusp of completely revolutionizing the way things get made.

>> this market is growing like doubling each year for us within arconic. it's a huge advantage to our customers. our customers are demanding for innovative products that have lower cost. and you know, that's one of the reasons why we're doing this. >> and it's not surprising. additive is a focus of every major industrial company right now. for example just yesterday, news that boeing's going to start incorporating 3-d printed parts into its 787 dreamliner. ge recently purchased two machinemakers and is printing the fuel nozzle for its new jet engine in-house. other companies, 3m, siemens, lockheed martin, ford are just some of the companies also looking into and developing this tech. but right now the biggest application is aerospace with 3-d printing in that industry expected to grow by about 55% per year through 2020.

that's where arconic is applying this right now. aerospace is the biggest business for that company. this is one of the ways alongside a broader push in digitization and automation that this company in the midst of activist investor pressure is cutting costs and looking to boost its profit margins. and of course, growing market share. guys? >> i learn, morgan, by the way, that's how alcoa got its start was back in the '20s or something coming up with some way to use aluminum in planes, and you know, so -- you know, it almost feels like with this 3-d printing like it's so new. but maybe this is just the next, you know, different thing. >> i'm glad you brought that up because i was talking to the folks here yesterday. and they said that they started experimenting with 3-d printing in its earliest forms almost 30 years ago. and that they've been really seriously looking at this for about 20 years. now the metal part of 3-d printing, which is how, you know, a part like this gets made, is a much newer technology that's really become much more in force in the last couple of

years. but 3-d printing is one of those technologies you've heard about it on the consumer side. you know 3-d printed chocolates, things like that. but on the industrial side this has been in the works for decades. and it is now at a tipping point where you're really starting to see it disrupt the manufacturing process. particularly in things like aerospace where you need a lot of customization and sort of high skill to make these parts. >> you know it's serious if those glasses are 3-d printed, too. pop them out of the machine and put them on. thank you, morgan, appreciate it. our morgan brennan this morning. google responds to the department of labor's claims that its alphabet unit has systemically paid female employees less than their male counterparts. google's vp of people operations, such a google title, said in a blog post that the technology giant conducts, quote, extremely scientific and robust, end quote, annual analysis to help calculate fair salaries. the executive also said the company takes into account role, job level, job location, and performance ratings.

but that all of it is blind to gender and race. >> okay. >> good goal. >> and ceos are arriving at the white house to meet with president trump today. ibm's ceo arrived just a few minutes ago. we will have some more visuals of those making their way into the white house as they get there ahead of this meeting this morning. >> all right. when we return, jim cramer live from the new york stock exchange. we'll get his thoughts on the markets this morning and today's stories and here are futures. . the dow has turned around now. it's been bouncing all over the place this morning. we'll be right back. [weather reporter]: governor has declared a winter weather emergency... announcer: soon, insurance companies won't pay for damages, that is, not if they can help prevent damages from happening in the first place.

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jim cramer jones us from the new york stock exchange. someone told me was it april 11th today or something? isn't the quarter over? aren't earnings coming like they normally do? isn't that something we should be paying attention to? >> yes, but it's the season is a little later here, i would have expected a couple of companies started to report including the alcoa. very interesting. >> like acme. lately we've been seeing, i don't know whether we call it listless but this should give a

guy like you something to at least be able to explain some market moves based on earnings finally, because it's been hard to interpret what the heck is happening for the past couple of weeks. >> it's true. see what delta says. american had good numbers last night released this morning. obviously united has another kettle of fish there but we'll get delta and then we'll get the big banks all at once, which doesn't really help except if you're bank of america. wells fargo trying to get ahead of the news issuing the negative stuff ahead. maybe they have some positive stuff, i don't know. >> at least every hint of tax reform going ahead, being lay it delayed, not being delayed we've keyed off a lot of that. >> remember that? that was a big deal. they don't do a lot of congress in april. there's just a lot of -- boy

they've really kind of, it's just off the radar screen. remember we used to talk about the trump trade? >> yes, i know. the former trump trade almost. >> the cone trade, i don't know, geez, the oscar munoz trade. >> yes, you know, jim, how belligerent would you get if you paid for your seat and were sitting there, maybe you might get unruly. i don't know, maybe you wouldn't, maybe you would, i don't know. >> i was going to visit my daughter this weekend out in oregon. really should you fly? people forget is that they consolidated all the airlines. there's only like airlines they don't really compete. that's part of the problem. remember when airlines competed and you would say oh, that guy is cheaper than that guy. >> there you go, jeff, i mean jim. >> he's with me on this. >> no he's not. he goes both ways. he like to stir things up.

you're glad the airlines are making some money final ly, cramer. >> they get the return on capital. warren buffett is great. it's about time they made money. >> don't do this. >> it's not like you can say i'm not flying them. i'm not taking amtrak. i'm taking the other guy. >> yeah, right. >> i'm not, there's another -- i'm taking norfolk southern. >> exactly. >> bus is not a good alternative. >> my dad tried that, because amtrak got so expensive. >> tough to be on the bus, the fumes. anyway thanks, jim, we'll see you at the top of the hour. tomorrow on "squawk box" we head to the auto show, the ceo of porsche north america and the head of maserati global joins us at 6:30 a.m. eastern time. we'll be right back. it's been over 100 years since

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american express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. find out how american express cards and services can help prepare you for growth at open.com. welcome back. we've been talking airlines all morning, the united controversy and debacle, but get, this the chairman of the fcc reversing a 2013 proposal to lift the ban on

inflight cell phone calls. there was a proposal so that we might be able to make calls. now the proposal is off the table. the fcc chair says he doesn't believe moving forward with the plan is in the public interest. removing the option is a win for people who "value the moment of quiet in the skies." >> we have an example of authority and what happened in the subways. i actually thought no one is going to be on the phone down there and boy was i wrong. >> i know that you wanted this. >> i don't want to sit next to someone calling but as a free marketeer, states rights kind of guy. >> right. >> i think you'd want to give everybody the option. >> guardrails, guardrails. >> if delta doesn't want to do it, they don't have to. it can become a competitive advantage for american. >> capitalism requires guardrails. these are guardrails no, cell

phones. >> we're reversing our seats today. >> so you don't blglide off the road and tumble down the side of the road in flames. you need guardrails. >> who is the greatest guardrail is kelly evans. >> that's very fun. and kind. >> are you coming tom snow. >> nope, nope. >> join us tomorrow. "squawk on the street" begins right now. ♪ good morning, welcome to strpt strt. i'm carl quintanilla with david faber and jim cramer. the president meets with ceos at the white house this morning, more tough talk on north korea, putin is now on the tape reacting to syria. europe relatively mixed. oil shooting for six straight up days and